U.S. About to Hit $20 Trillion in Debt: Here’s How It Affects You, by Shaun Bradley

If the US government does not get a handle on its debt, it will eventually blow apart your savings and your retirement, perhaps sooner rather than later. It’s just that simple. From Shaun Bradley at theantimedia.org:

As the vulture pundits in the mainstream media pick apart hollow political scandals, the essential bankruptcy of the federal government looms just ahead. The national debt is creeping toward 20 trillion dollars, and the United State’s largest problem is once again staring the world in the face.

Just before the government was slated to shut down in 2015 (as it did in 2013), Congress was able to pass a delay on the debt ceiling decision until March 15th of this year — Wednesday of this week. Recurring uncertainty caused by events like this has implications that extend far beyond our own borders. The amount of leverage in the current system has already forced foreign holders of U.S. debt to question the real value of America’s full faith and credit.

2016 was a record-setting year for the liquidation of foreign-held U.S. bonds, topping out at nearly $405 billion. The selling was led by China, America’s second-biggest creditor, which currently holds over $1 trillion of U.S. debt, almost 28% of the total held by foreign central banks. They weren’t alone, though, and even the U.S.’ number one lender, Japan, has rolled back their positions to protect themselves as the reality of U.S. insolvency comes into focus. A gradual change has been set in motion, and the global superpower status of the United States may be systematically eroded — not militarily, but economically.

If the government does shut down again, the Treasury Department reportedly has as little as $66 billion in reserves and just enough income from taxes to meet its essential obligations. Entitlements like social security and Medicare will likely be unaffected, but if lawmakers can’t collaborate to pass some kind of resolution, the power to allocate additional federal spending will largely be turned over to President Trump. The initial hiring freeze on federal employees that was implemented shortly after his inauguration could be just a taste of what’s to come.

To continue reading: U.S. About to Hit $20 Trillion in Debt: Here’s How It Affects You

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